joint venture marketing
While joint ventures are an effective way to build your customer list and boost your profits, they must be done with advance planning and effort if they are to be successful. There are some common mistakes small business owners make that can sabotage the entire joint venture plan. We have five of those errors listed here to help you avoid them in your next JV partnership.
Failing to Research Prospective Partners
It is essential that you take the time to thoroughly research every potential JV partner before signing a contract with a company. Check the company’s credentials, customer service history and quality of products. Find a company that offers a similar but different product, as you want to cater to the same market base without directly competing with one another.
When you know your prospective partner well before you join forces, you are much more likely to succeed in your joint venture.
Violating Privacy Agreements
When you work closely with another business, you will undoubtedly become privy to some of their company secrets. A privacy agreement is a must for any joint venture to protect important information and client lists. Draw one up before your joint venture becomes official and adhere to the terms without fail.
Giving Too Much, Too Soon
By the same token, you will probably be asked to share some of your own trade secrets and client information with your joint venture partner. Before handing over your customer lists, get permission from your clients to provide that information to your partner. Otherwise, you may find yourself with a long list of disgruntled customers when they begin receiving correspondence from your partner that they didn’t request.
Not Giving Enough to Your Partner
Joint ventures must be symbiotic if they are to be successful, meaning that both businesses must see equal benefits from giving their all to the partnership. Whether you are the big company helping a smaller business along or vice versa, it is important to know that your partner is happy with his piece of the pie. This ensures that your relationship will continue in a harmonious fashion, and that both parties will do their part to make the partnership successful.
Omitting an Exit Strategy in Your Contract
Even the best of relationships must eventually come to an end, and this includes your joint ventures. While some of these business agreements will merely dissolve when they have run their course, others will result in a merger or a buyout that benefits both companies in the long run.
To ensure your partnership ends as smoothly as it begins, construct an exit strategy that becomes a part of your initial contract. This gives you an out if the relationship is not as successful as you hope, as well as a means of renegotiation if you want to revel in your success a bit longer.
Joint ventures are a successful way to market your business – when they are done correctly. By avoiding these common pitfalls, you can make the most of your partnership for a healthier bottom line overall.
christian fea is CEO of Synertegic, Inc. A joint venture marketing firm. He exemplifies how to profit from Joint Venture relationships by creating profit centers with minimal risk and maximum profitability.
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